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									                                                                                 APPENDIX 3

 CABINET                                                            MARCH 2005

 REPORT TO    Cabinet
 SUBJECT      Options for Funding Community Audit Scheme Proposals and the
              Swimming Pool Refurbishment at Basingstoke Sports Centre
 WARD(S)      All
 KEY DECISION Yes: Ref: 357/RC and 366/RC
 STATUS       Open – Routine Matter for Discussion
 REPORT OF    Community Overview Committee
 CONTACT      Head of Leisure Services
                      Contact: Marion Short (01256) 845217

1.    Purpose

1.1   This report sets out the options for funding the schemes identified from the community
      audit project and the scheme to refurbish the swimming pools at Basingstoke Sports
      Centre. This report is to be read in conjunction with three other reports on this agenda
               Audit of Community Facilities in Chineham, Lychpit, Hatch Warren &
                Beggarwood and Kempshott and Refurbishment of the Sports Centre Swimming
                Pools (Paper B)
               Audit of Community Facilities in Hatch Warren and Beggarwood, Kempshott,
                Chineham and Lychpit (Paper B - Appendix 1)
               Refurbishment of the Sports Centre Swimming Pools (Paper B - Appendix 2)

1.2   This report accords with the Council’s Budget and Policy Framework by seeking to
      support key areas of community need within a confirmed sustainable financial
      framework aligned to the Council’s corporate priorities.

2.    Background Information

2.1   Following decisions by the Council which agreed:

      i)        the principle of transferring part of the S106 funding allocated to Kempshott
                Park and Binfields, Chineham for community facilities to the refurbishment of
                the swimming pools at Basingstoke Sports Centre; and that
      ii)       the Community Overview Committee undertake an audit of community
                facilities in Chineham, Lychpit, Hatch Warren & Beggarwood and Kempshott

      work has been carried out to identify scheme proposals and cost estimates for the
      respective projects.

                                                                                 APPENDIX 3

3.     Current Situation

       Capital costs

3.1    Work has been carried out to identify the estimated costs of the schemes from the
       community audit project to address identified needs in the Chineham, Lychpit and
       Hatch Warren and Beggarwood area. The scheme proposals that have been developed
       are presented in a separate report (Appendix 1) on this agenda item, and cost estimates
       for delivering all of the scheme proposals are summarised in the table below. It should
       be noted that these cost estimates are preliminary and are not based on drawn schemes
       for specific sites. Once it is known which schemes may be supported, designs can be
       developed and further detailed costings obtained.

3.2    The consultant design team has reported its conclusions on the cost of refurbishing the
       swimming pools at Basingstoke Sports Centre. The detailed scheme proposals are
       presented in Appendix 2 of Paper B.

3.3    The total capital costs for the respective projects are as follows:

        Area/Scheme                                      Estimated cost
        Community Audit proposals – all schemes          £795,000
        (Chineham and Lychpit)
        Community Audit proposals – all schemes          £1,415,000
        (Hatch Warren and Beggarwood)
        Project Management costs of implementing         £44,000
        Community Audit schemes (2% of capital
        Sports Centre                                    £2,460,000 (see note 1 below)
        Total                                            £4,714,000

       Note 1:         The total cost of the Sports Centre scheme is estimated to be £2,620,000.
                       However £160,000 has already been allocated to appoint the design team
                       to progress the scheme up to RIBA Stage E. Project Management costs
                       of implementing the Sports Centre scheme are already included in the
                       estimated cost of the scheme.

3.4.   Provision will also need to be made in the Asset Management Plan for the
       refurbishment and replacement of items in accordance with life cycle costs for each
       element of provision.

       Revenue implications

3.5     In addition to the above capital costs there may be a revenue cost of approximately
       £100,000 if two youth workers are employed for a period of three years in association
       with the delivery of the youth scheme proposals in Hatch Warren.

                                                                                       APPENDIX 3

3.6   There may be some additional revenue implications for the Council arising from the
      community audit scheme proposals primarily relating to maintenance. Once it is known
      which schemes are to be supported further work can commence to identify the likely
      scale of those revenue implications, but at this stage they are not envisaged to be

      Identified Resources

3.7   The resources that could be utilised to fund the capital scheme proposals contained in
      this report are detailed in the table below;

          Identified Resources      Secured Funding        Anticipated        Grant      Total
                                    (included in the       Funding (not yet   Aid
                                    Recreation and         included within    Target
                                    Culture Capital        Capital
                                    Programme)*            Programme)*
          Chineham& Lychpit         £1,753,000             £65,000                       £1,818,000
          (community       S106
          including    Binfields
          Sports Barn)
          Hatch     Warren    &     £1,454,000             £69,000                       £1,523,000
          (community       S106
          including Beggarwood
          Lane Sports Barn)
          Informal        Youth     £ 75,000                                             £75,000
          Grant Aid Target                                                    £100,000 £100,000
          POTENTIAL                 £3,282,000             £134,000           £100,000 £3,516,000

      *          A breakdown of these funds is detailed in Appendix A

      External funding for Sports Centre Scheme

3.8   Members should note that the following external sources of funding have previously
      been explored for the Sports Centre swimming pool scheme but without success.

                 Commercial loans – the Trust is committed to servicing existing loans taken
                  out for the ladies gym and upper level redevelopment; the swimming pools
                  would not make a sufficient return in terms of improved income to service a
                  commercial loan
                 Trust fundraising – a campaign has raised £200,000 but this has been
                  allocated to upper level works to reduce commercial loan liabilities
                 Private investment – this is not a not option under the Trust’s legal structure
                  where the Trustees are sole share holders
                 Sport England Lottery Fund- the scheme was not a priority for funding

                                                                                  APPENDIX 3

                  Grosvenor Estates – Grosvenor have funded the refurbishment of the Sports
                   Centre reception area; discussions have been held regarding the swimming
                   pool scheme and they have not indicated any intention to contribute further

       Potential Grant Aid Sources for Community Audit scheme proposals

3.9    There may be opportunities to secure grant aid or partnership funding from other
       sources towards the community audit scheme proposals, particularly the youth related
       schemes. At this stage it is difficult to estimate how much money could be secured but
       Officers have estimated that £100,000 could be achievable, which is reflected in the
       table above. Potential sources include:

                 Company sponsorship (e.g. Sainsbury’s, Asda’s, and Orange)
                 Playing Fields Association
                 Hampshire Police
                 Four Lanes Trust
                 Community Safety Grants
                 Leisure Facilities Capital Grant Scheme

3.10   In addition, revenue funding may be available to contribute to projects, for example
       Hampshire County Council offer Revenue Grants for Youth Workers.

       Funding Shortfall

3.11   Taking into consideration the estimated costs of both projects (assuming all the scheme
       proposals from the community audit are fully funded) and the identified funding, there
       is a capital shortfall of £1,198,000. There is also no current revenue budget available to
       support these schemes.

3.12   In summary the financial position is as follows:

       Total cost of all community audit proposals
       and project management                                £2,254,000
       Total cost of Sports Centre Scheme
       (excluding £160k already allocated)                   £2,460,000
       Total cost of community audit proposals and
       Sports Centre scheme                                  £4,714,000
       Less Total identified resources                       £3,516,000
       Total funding shortfall                               £1,198,000

                                                                                  APPENDIX 3

       Options for funding

3.13   The Council will need to determine its strategic approach to the issues identified in
       the Community Audit. Either it is looking to provide facilities within the existing
       identified resources or it will need to consider identifying additional Council
       resources to fund the full proposals.

       Funding from identified resources

       Option 1 -     Fund all of the Community Audit capital schemes totalling
                      £2,254,000 from the identified resources outlined in the table above
                      and do not fund the Sports Centre redevelopment.

       a) the S106 funding would be directed to the community audit schemes in each area
          which would meet identified community need and satisfy developers
       b) the Sports Centre scheme would not being delivered
       c) the balance of any unspent S106 monies may have to be returned to developers

       Option 2 -     Fund the Sports Centre redevelopment from the identified resources
                      outlined in the table above leaving a balance of £1,056,000 which
                      could be used to fund higher priority schemes identified through the
                      community audit.

       a) some of the community audit schemes could be delivered but there would be
          insufficient funds to complete all the proposals which would not meet identified
          community needs
       b) the Sports Centre scheme would be delivered, but subject to agreement of
          developers to switch funds who may not be willing to agree if community proposals
          are not fully met

       Funding from identified resources and unallocated reserves

       Option 3 -     Fund all of the Community Audit capital schemes totalling
                      £2,254,000 from the identified resources outlined in the table above.
                      Use the remaining resources (£1,262,000) towards the Sports Centre
                      scheme and allocate an additional £1,198,000 of unallocated capital
                      reserves to fund the balance required for the Sports Centre.

       a) all community audit schemes would be delivered to satisfy community needs
       b) this option would more likely satisfy the developers by providing appropriate
          community facilities to meet the needs of the new occupants from their

                                                                                    APPENDIX 3

       c) by only utilising the balance of S106 funds for the Sports Centre scheme it is more
          likely to achieve developers’ agreement to transfer the funds, however this cannot
          be guaranteed at this stage
       d) this option fulfils the Council’s ‘in principle’ decision to transfer part of the S106
          funds to the Sports centre scheme
       e) the revenue reserve for capital purposes would be reduced by £1,198,000

       Option 4 -     Fund the Sports Centre redevelopment from the identified resources
                      outlined in the table above. Use the remaining resources
                      (£1,056,000) towards the Community Audit capital schemes and
                      allocate £1,198,000 of unallocated reserves to fund the balance

       a) Both projects would be fully funded, although nominating the S106 funds to the
       Sports Centre may not fully satisfy developers
       b) The need for use of unallocated reserves is the same as in option 3 so there is little
       merit in this option

3.14   All funding options include an assumption that grant aid funding opportunities will be
       fully explored and achieve a contribution to the projects of £100,000.

3.15   On the assumption that the Council should seek to deliver all the schemes
       identified in the Community Audit to meet identified need, the option that offers
       the most appropriate way forward in terms of achieving the delivery of the
       community audit proposals and the Sports Centre Scheme is Option 3.

4.     Consultation Already Undertaken

4.1    Discussions with Ward Members, local residents, stakeholders and young people have
       taken place throughout the community audit project and during the development of
       scheme proposals. Initial discussions have also been held with those parties who are
       affected by the potential delivery of the scheme proposals. All parties can see the
       benefits of the proposals but would wish to hold further discussions at the next stage
       when a decision has been made as to which schemes are to be supported in order to
       address any issues to their satisfaction.

5.     Environmental and Sustainability Considerations

5.1    The consultation exercise has ensured that local views are considered in the process of
       identifying the type and scale of local recreation facilities that are required which will
       help to promote sustainable communities in the affected areas.

5.2    Any changes to the nature of the recreation provision originally envisaged in the
       affected areas will result in the opportunity to reconsider the layout and land use to
       ensure that the best planning outcomes are achieved.

                                                                                   APPENDIX 3

6.    Financial Implications

6.1   The total costs of funding the full proposals outlined in this report are:
             Community Audit proposals                       £2,254,000
             Sports Centre                                   £2,460,000
             Total cost                                      £4,714,000 *
             * This sum is shown in Paper B as £4,809,000 to account for an additional £95,000 risk
             contingency for the Sports Centre scheme agreed after the Community overview meeting.
      It should be emphasised that the costs of the community audit proposals are preliminary
      estimates and not based on drawn schemes. The cost and deliverability of each scheme
      will be verified by using the capital appraisal process to ensure a robust project
      management approach. The Sports Centre scheme has been costed by consultant
      quantity surveyors.
6.2   The total costs could be funded as follows;
             * Secured Funding
             (current capital programme)                     £3,282,000
             Current shortfall                               £1,432,000

6.3   This shortfall could be met from;

             * Developers contributions – anticipated
             funds but not yet received.                     £134,000
             * Grant Aid                                     £100,000
             * Additional Unallocated Reserves-
              (Revenue Reserves for Capital Purposes –
              Capital Priorities)                      £1,198,000

6.4   Paragraph 3.13 details a number of possible options for delivering the proposed
      schemes and shows the financial implications of each option.

6.5   Based on the likely implementation programme of the community audit schemes,
      which shows a programme of delivery over 3 financial years it is possible that the
      Council would need to forward fund up to a maximum of £234,000 (developers
      contributions not yet received and £100,000 grant aid) from its capital resources
      pending receipt of developers contributions and grant funds. The Council has adopted
      this approach in the past but the funds could be at risk as their receipt is not certain.
      This funding factor has a revenue impact in terms of interest forgone of £12,000 per

6.6   The proposed budget for 2005/06 recommended by Cabinet on 25th January identified
      an unallocated Revenue Reserves for Capital Purposes of £3.195m. If Option 3 was
      agreed, the unallocated balance would be reduced by £1,198,000 to £1,997,000.

                                                                                 APPENDIX 3

      Revenue Implications

6.7   It is important that the revenue implications of the above options are considered as part
      of the overall funding requirements. The full community audit proposals do have an
      unbudgeted revenue cost which would be assessed using the capital appraisal model.

6.8   The revenue implications of the Sports Centre scheme are set out in Paper C.

7.    Legal and Personnel Implications

7.1   Funding for the Sports Barns was secured under S106 agreements. Although the
      agreements give the Council some flexibility in the use of the funds the developers are
      being kept appraised of the Community Audit project and the outcomes. If appropriate,
      Deeds of Variation will be negotiated with the relevant developer/landowners to reflect
      the final agreed provision. This will involve both the Beggarwood and Binfield sites
      and also the development at Sherfield Park.

8.    Recommendation

8.1   It is recommended that:

      i) in order for the Council to:

              a) deliver the scheme proposals that meet identified need in Hatch Warren and
              Beggarwood, Kempshott, Chineham and Lychpit arising from the Community
              Audit, and

              b) support the refurbishment of the Swimming Pools at Basingstoke Sport

      Community Overview Committee recommend to Cabinet that the Council fund all of
      the Community Audit capital schemes at an estimated cost of up to £2,254,000 from the
      identified resources as set out in the report, use the remaining resources (£1,262,000)
      towards the Sports Centre scheme (subject to agreement from developers), and allocate
      an additional £1,198,000 from the Revenue Reserves for Capital Purposes – Capital
      Priorities to fund the balance required for the Sports Centre.

 APPENDICES                   A. Funding breakdown


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